On the heels of Ford Motor Credit's deal, the largest auto loan securitization ever, Nissan's captive finance unit brought it own largest deal ever and enjoyed continued success in doing so. The $1.36 billion Nissan Auto Owner Trust 2002-A offering priced in line with the mammoth Ford deal, seeing subordination levels cut by 25 basis points to 6.25% for this, the eighth term ABS for the once-embattled firm.
As per its modus operandi, Nissan followed one of the Big-Three auto makers into the market, as Corporate Manager of Securitization Jennifer Kuritz carefully plots the timing of her deals. "I had anticipated a heavy month of auto supply in January and we like to follow (the Ford's) instead of compete," she said.
With this offering, Nissan came on the heals of a benchmark issuer - striking when the iron is hot and still beating most of the expected competing supply, getting in while spreads are still low and investors are still hungry.
Like Ford, the offering saw heavy demand and was oversubscribed about two times she added, leading to spreads in-line with the comparable fixed-rate classes of the Ford deal. Nissan's two- and three-year A-3 and A-4 classes priced to yield just one basis point outside of Ford, with average lives that were just a touch longer.
"The bankers asked if we wanted to upsize the deal but we don't want to flood investor portfolios with our paper," Kuritz added. "This was our largest deal to date and we want to slowly ramp up our issuance program."
The move is part of the strategy for Nissan, rather than acting opportunistically, as most issuers do when the chance arises. "We are careful with the securitization platform here and it is important for Nissan. The idea is to keep investors wanting our paper."
Nissan priced three auto loan and one auto lease deals in 2001 and will likely follow a very similar path this year. Also, Nissan set up an innovative warehousing facility through administrative agent JPMorgan, which allows for both loan and lease collateral.
